The following memorandum from the Delegate of the Commissioner for Employees’ Compensation has been referred to me for advice:

Your advice would be appreciated on the question whether an injury sustained by a naval rating [X.] whilst undergoing a sentence of 60 days’ imprisonment in a civil gaol in lieu of detention for desertion is admissible to compensation in accordance with the provisions of the abovementioned Act.

X. entered into a 12 years engagement with the Royal Australian Navy and commenced his service on 24th September, 1945. He deserted on 1st July, 1948, but was apprehended on 11th May, 1950, and on the following day was sentenced to 60 days’ imprisonment in lieu of detention for desertion.

He was committed to the Adelaide Gaol where the work allotted to him was the operation of a circular saw. On 2nd June, 1950, whilst operating the saw, his hand accidently came in contact with the blade and he thereby suffered the loss of two joints of the second and third finger of his right hand. He was despatched for discharge, physically unfit for Naval Service, on 19th July, 1950.

At the time of his apprehension the employee’s conditions of service were such as to make him an ‘employee’ within the meaning of the Act. However, he received no pay from the Navy during his previous absence or, more particularly, whilst subsequently serving his sentence when his hand was injured as already described. In these circumstances and having regard to the fact that the injury was sustained whilst undergoing a sentence in a civil gaol, some doubt is felt on the question whether the rating was an ‘employee’ within the meaning of the Act at the time of the injury and, if so, whether the injury arose out of or in the course of his employment by the Commonwealth.

Owing to this non entitlement to pay because of his sentence the employee suffered no loss of earnings during the period of total incapacity resulting from the injury and would not therefore be entitled to weekly payments of compensation under paragraph 1(b) of the First Schedule to the Act in that respect. However, having regard to the fact that he has suffered ‘specified injuries’ as the result of the accident, the question whether he is entitled to the lump sum payments provided therefore by section 12 and the Third Schedule depends on the determination of the question raised in the latter part of the previous paragraph of this memorandum.

(2)  In section 4 of the Commonwealth Employees’ Compensation Act 1930–1948, ‘employee’ is defined as including, subject to certain exceptions which are not here material, any member of the Naval Forces of the Commonwealth.

(3)  Section 119 of the Defence Act 1903–1949 (which is applied in relation to the Naval Forces by Section 5 of the Naval Defence Act 1910–1948) provides:

119. No member of the Defence Force shall, except as prescribed, receive any pay or allowances while under any charge of which he is afterwards convicted by any Court or by his Commanding Officer, or while under sentence of penal servitude, imprisonment, detention, or field punishment by any Court or by his Commanding Officer, or during absence from duty without leave.

(4)  This section has the effect of depriving a ‘member of the Defence Force’ of pay while under sentence of imprisonment or during absence from duty without leave but he remains a member until he receives his discharge from the Defence Force.

(5)  In the case of X., it appears from the papers that a recommendation for his discharge was made consequent on the injury he sustained while under imprisonment but he was still a member of the Naval Forces at the time the accident occurred and therefore, in my opinion, an employee within the meaning of the Commonwealth Employees’ Compensation Act.

(6)  Under Section 9 of the Act, he is, however, only entitled to be paid compensation in respect of the injury if it was caused by accident arising out of or in the course of his employment by the Commonwealth.

(7)  In South Maitland Railways Pty. Ltd. v. James, 67 C.L.R. 496, the question was whether an injury, which resulted in the death of a worker, arose out of and in the course of his employment. In his judgment, at Page 500, Latham C.J. said:

In order to justify a court in coming to the conclusion that an injury arose in the course of an employment, it is not enough to show that the injury had something to do with the employment, or that if it had not been for the fact that the worker was employed by the particular employer in question he would not have received the injury. An injury arises in the course of a worker’s employment only when it arises when the workman is doing something ‘which is part of his service to his employer or master. No doubt it need not be actual work, but it must, I think, be work, or the natural incidents connected with the class of work—e.g., in the workman’s case the taking of meals during the hours of labour’ (Charles R. Davidson & Co. v. M’Robb (1918) A.C. 304 at p. 321, per Lord Dunedin). It is only when a workman is doing something which he was employed to do, or something which is incidental to that which he is employed to do, that he is acting in the course of his employment—or, in other words ‘in effect the same thing—namely, when he is doing something in discharge of a duty to his employer, directly or indirectly, imposed upon him by his contract of service …’ (St. Helen’s Colliery Co. Ltd. v. Hewitson (1924) A.C. 59, at page 71, per Lord Atkinson).

Starke J., at Page 502 said:

The argument was that the injury did not arise out of and in the course of the worker’s employment.

The proper construction of these words is now fairly well settled. The words ‘out of’ require that the injury had its origin in the employment, whilst the words ‘in the course of’ are not equivalent to ‘during’: the injury must occur in the course of the employment, that is, whilst the worker is doing something which is part of his service to his employer or master or incidental to the employment, or, in other words, whether the workman was at the time of the injury about his own business or that of his master.

(8)  On the reasoning of the High Court in James’ case, the accident, which resulted in the injury to X., cannot, I think be said to have arisen in the course of his employment. The work he was carrying out at the civil gaol had no relation to the discharge of his duties as an ‘employee’ of the Commonwealth. In carrying out that work he was not doing something which was part of his service to the Commonwealth as employer or incidental to that service. The injury should, I think, be considered to have occurred at a time when there had been an interruption in the performance of his duties to the Commonwealth as a member of the Naval Forces.

(9)  As section 9 is now expressed in the Commonwealth Act, it is not, however, necessary that the injury to an employee should be shown to have arisen both out of and in the course of his employment. It is sufficient if the injury results from accident arising out of or in the course of employment by the Commonwealth.

(10)  The authorities show the expression ‘accident arising out of his employment’—to use the words of Viscount Maugham in Dover Navigation Co. Ltd. v. Isabella Craig, 1940 A.C. 190 at page 193—connote ‘a certain degree of causal relation between the accident and the employment’.

(11)  In the present case, X. was not by reason of his imprisonment for desertion released from his engagement as a member of the Naval Forces but his service as an employee of the Commonwealth cannot, I think, be considered as having continued during the period of his imprisonment. He was carrying out no duties as a naval rating at the time of his injury and in fact his services were not available to the Commonwealth until he was released from the civil gaol. In these circumstances there was not, in my view, in any relevant sense any causal relation between the accident at the gaol and his employment by the Commonwealth.

(12)  In Davidson & Co. v. M’Robb 1918 A.C. 304 at Page 314, Lord Finlay said—‘“arising out of the employment” obviously means arising out of the work which the man is employed to do and what is incident to it—in other words, out of his service.’

(13)  The injury suffered by X. did not arise out of any work which he was employed by the Commonwealth to do nor can it be said that it was incidental to the carrying out by him of any duties in relation to his service as a member of the Naval Forces.

(14)  In my opinion, therefore, the rating is not entitled to be paid compensation in respect of the injury.